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The Fine Print

April 24, 2013

Although no one enjoys entertaining worst-case scenarios, there’s no denying that life doesn’t always go according to plan. That’s why it’s critical that your loved ones are taken care of in the instance that disaster does strike.

Life insurance can offer a powerful safety net by safeguarding your family’s future and giving you peace of mind. Investing in a life insurance product can mean the difference between easing their stresses and burdening them with money worries on top of their loss.

However, before you sign up for a life insurance policy, it pays to understand the details by reading the PDS or contacting a provider to ask a question. Here are some of the major factors to consider before signing on the dotted line.

Understanding your policy type

Before committing to life insurance, it’s important to understand what type of life insurance policy you will be getting. In Australia, most providers offer term life insurance policies. This type of life insurance policy provides cover for a specific amount of time at a fixed rate, with the life policies generally expiring at age 75.

 Accounting for critical illness

Critical illnesses can be debilitating for families and can often severely impair a breadwinner’s ability to earn an income. That’s why it’s important to consider whether your insurance policy factors in an optional critical illness benefit to offer protection against illnesses and major injuries such as heart attacks, cancer and sudden paralysis.

 Age and lifestyle factors

It pays to note that life insurance premiums can often vary depending on factors such as age, gender and lifestyle. High-risk habits such as smoking generally result in higher insurance premiums and must be disclosed before committing to a life insurance policy. Age can also affect the rate of your premiums – in most cases, your insurance premiums increase incrementally as you get older.

Although these conditions shouldn’t deter customers from investing in life insurance, it’s important to stay abreast of this information when choosing and committing to an insurance policy.

There’s no reason to wait around until you’re in your 30s or 40s to start researching life insurance. And depending on your health and lifestyle, the older you are means the more expensive it will be to purchase life insurance.

While choosing the right life insurance policy for you can be challenging, take the time to read the PDS so you can be confident in your life insurance decision.

Posted on April 24, 2013

Tags: business


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